Acorn Energy Announces Q4 and Fiscal Year 2013 Results

Acorn Energy Announces Q4 and Fiscal Year 2013 Results
PR Newswire
WILMINGTON, Del., March 17, 2014
WILMINGTON, Del., March 17, 2014 /PRNewswire/ --Acorn Energy, Inc. (NASDAQ:
ACFN) today announced its results for the fourth quarter and fiscal year
periods ended December 31, 2013.
For the fiscal year 2013 period, revenue increased $2.3 million, or 12%, to
$21.8 million, compared to $19.4 million in the corresponding 2012 period.
The net loss for 2013 was $29.7 million, or $1.57 per share, compared to a net
loss of $16.7 million, or $0.93 per share, in 2012. Results for the year
include a non-cash charge of $6.7 million ($0.36 per share) for impairment of
goodwill and other intangibles and $1.4 million ($0.07 per share) for
restructuring charges.
For the fourth quarter of 2013, Acorn revenue increased 21% to $5.8 million
compared to $4.8 million in the 2012 fourth quarter. The net loss for the
quarter was $5.3 million, or $0.24 per share, compared to a net loss of $5.4
million, or $0.30 per share, in the corresponding 2012 period.
John Moore, President and CEO of Acorn Energy stated, "In 2013, all four of
our businesses made great progress in developing their technologies and
growing their customer bases. USSI positioned itself as the leader in the
emerging field of advanced microseismic monitoringby winning a pivotal trial
conducted by one of the supermajor oil companies. DSIT was recently awarded
the largest order in its history for the detection of underwater terrorism.
"Acorn increased backlog 157% from $7.2 million in the third quarter to $18.5
million at the end of the fourth quarter. We made adjustments to our
corporate expenses which will reduce cash corporate overhead going forward by
35%.We strengthened the balance sheet, ending the year with $15.8 million in
corporate cash and no debt at the parent level.
"In addition, 2014 has gotten off to a good start. GridSense has received
$2.8 million of new business, as its early-alert monitoring system for key
equipment on the electric grid is receiving greater recognition. OmniMetrix
secured orders for nearly half of its 2014 planned units as the need for
backup generators grows in the face of increasing outages in the electric
utility industry. Joe Musanti assumed the roleof COO at Acorn after
dramatically reducing the cash needs at both companies. We are excited about
2014. We are actively developing another major opportunity for USSI and look
forward to updating you on our progress in the future."
Portfolio Companies
U.S. Seismic Systems, Inc. (USSI)
USSIhas developed the first cost-effective fiber optic sensor system for
mapping traditional as well as unconventional oil and gas fields. More
effective mapping leads to increased production. The technology is also
applicable for monitoring production to avoid environmental problems.
Recently it was reported that unconventional methods such as hydraulic
fracturing accounted for 35,000 new wells annually in the U.S. Approximately
40% of the fracturing jobs occur in very high temperature wells, in which it
is difficult to impossible for legacy seismic equipment to function. USSI's
fiber optic technology has been designed to operate in these harsh conditions,
as well as low to mid temperature applications. Furthermore, over 70% of the
operating companies queried in a recent survey reported the failure of
fracturing jobs to meet performance expectations was due to a lack of
understanding of the subsurface.
During 2013, USSI invested in testing its technology with producing and
service companies. In each test, USSI gleaned important information about its
sensors and peripheral equipment. The in-field applications have led to
refinements and changes as customers and the USSI team work collaboratively
towards the commercialization of the first major product change in seismic
mapping.
Revenue in 2013 was $1.5 million; about the same as 2012's revenue and was
primarily generated from testing. Fourth quarter revenue of $320,000 in 2013
increased $173,000 over the 2012 fourth quarter revenue of $147,000. The
losses reflected in the financial statements with respect to USSI primarily
represent purposeful spending on our part to perfect the USSI tool and to set
the stage for commercialization.
DSIT
DSIT Solutions Ltd., based in Israel, develops and produces advanced
underwater sonar detection systems to protect critical harbor and offshore
assets against terrorist and other attacks. Primary markets for its systems
are navies, homeland security agencies, oil and gas (O&G) companies, nuclear
power facilities and port authorities. The technologies are also attracting
interest from owners of offshore oil and gas platforms.
The company generated revenue in 2013 of $13.1 million vs. $13.6 million in
2012. Fourth quarter 2013 revenue was $3.4 million, compared to $3.6 million
in the prior year. The decreases were primarily due to the winding down of a
major project. Lower revenues and margins were due in part to unanticipated
delays and installation complications for a major project.
In the fourth quarter, the company closed an $11.2 million contract which
raised the backlog entering 2014 to $13.4 million, an increase of $3.8 million
from the $9.6 million reported on December 31, 2012. The contract includes
approximately $3.2 million for maintenance and support beginning in late 2015
and the potential of an additional $3.2 million for testing trials.
GridSense^®
GridSense develops and markets remote monitoring systemsfor electric utility
companies. The systems are used for outage management, power quality
measurement, systems planning, trouble-shooting and maintenance. During the
second quarter of 2013, GridSense restructured its operations in the U.S. and
Australia to improve efficiencies and cut costs. The company's focus is on
the early detection of problems on power lines and transformers and the
prevention of power outages. There are thousands of transformers in the U.S.
utility industry, most of which are approaching or past their expected life
expectancies. Compared to manual inspections, the use of remote monitoring
can save time and money and alert the utilities to problems and possible
failures. In addition, closer monitoring and maintenance can help extend the
usable lives of transformers, whose replacement costs are prohibitive.
New management has realigned sales and engineering to focus on customers in
the pipeline or in those pilot programs which are viewed as having the
greatest potential to provide near-term revenue. As a result, revenue in 2013
grew 37% to $5.0 million from 2012. Recently the company obtained orders from
five utilities for a total of $2.8 million, nearly one-half the total sales in
2013. Gross margins improved from 26% to 36% and are expected to be
maintained or increase in 2014.
OmniMetrix™
OmniMetrix was acquired by Acorn in 2012. It has developed the most advanced
system for wirelessly and remotely monitoring back-up generators to prevent
failures. The system collects key data continuously and alerts the equipment
manager to signs of trouble. In 2013, OmniMetrix coupled its data analysis
capabilities with an active voice call center providing customers with a high
caliber support system as well as creating a new high margin revenue stream.
The U.S. installed base of generators is estimated to be 2 million. In
addition industry sources indicate that 100,000 commercial generators and
200,000 residential generators are sold annually. In early 2013, the
Environmental Protection Agency (EPA) required that certain large generators
collect and report data on running times and emissions or face significant
civil penalties. This new regulation should increase the need for
monitoring.
In 2013 new management changed the marketing plan, particularly in regard to
pricing and a focus on end-users. Management is also focusing on the
residential market, especially since new home construction is increasing, and
power outages from storms are drawing greater generator interest. As a result,
OmniMetrix revenue increased from $0.7 million in 2012 to $2.2 million in
2013. Fourth quarter revenue was $0.6 million as compared to $0.3 million in
2012. Gross margin in 2013 was 56% and was driven by the margin on monitoring
revenue which was 71% in 2013. Expenses were high in 2013 due to a buildup in
personnel begun in mid 2012 and a subsequent reorganization. In 2014, a close
association is being developed with GridSense on terms designed to cut costs
and through cross selling, intended to boost revenue.
Conference Call Information
The Company will host an investor conference call on Tuesday March 18, 2014 at
11am EDT to discuss its fourth quarter 2013 results and developments.
Participants can pre-register for the conference call by accessing this link:
http://dpregister.com/10042389. Pre-registering gives one immediate entry
into the call, zero wait time and will automatically populate your Outlook
calendar with an invitation.
Participants that would like to join the conference call, but have not
registered, can do so by dialing US Toll Free (866) 652-5200, International
Dial in (412) 317-6060 and asking for the "Acorn Energy Conference Call" (no
pass code required). If you are unable to participate in the live call, a
digital replay of the call will be available two hours after the end of the
live call through 9:00am EDT April 18, 2014 by dialing (877) 344-7529 or
International (412) 317-0088 and entering access code 10042389.
About Acorn Energy, Inc.
Acorn Energy, Inc. is a holding company whose four portfolio companies help
their customers achieve greater productivity, reliability, security, and
efficiency—factors which can lead to greater profitability. GridSense^®
provides monitoring for all critical points along the electricity delivery
system. OmniMetrix™ remotely monitors emergency back-up power generation
systems to increase their reliability. US Seismic Systems supplies fiber optic
sensing solutions to increase oil/gas production and lower costs. DSIT
provides security solutions from underwater threats to naval and marine based
energy assets. For more information visit:http://www.acornenergy.com.
Safe Harbor Statement
This press release includes forward-looking statements, which are subject to
risks and uncertainties. There is no assurance that Acorn Energy, Inc. or its
operating companies will continue to grow their respective businesses, or that
any of them will meet the expectations or execute the initiatives described or
referred to above. A complete discussion of the risks and uncertainties which
may affect Acorn Energy's business generally and the businesses of its
subsidiaries is included in "Risk Factors" in the Company's most recent 10-K
filed by the Company with the Securities and Exchange Commission.
Investor & Press Contact:
F. Kent Leacock
Acorn Energy
(925) 698-1431
kleacock@acornenergy.com
Financial Tables to Follow
ACORN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED STATEMENTS OF OPERATIONS
(IN THOUSANDS, EXCEPT NET INCOME (LOSS) PER SHARE DATA)
YearendedDecember31,
2013 2012 2011
Revenues:
Projects $ 14,128 $ 14,651 $ 11,368
Products 5,962 3,880 7,049
Services 1,666 888 511
Total revenues 21,756 19,419 18,928
Cost of sales:
Projects 12,225 10,749 7,886
Products 3,931 2,996 3,730
Services 444 471 399
Total cost of sales 16,600 14,216 12,015
Gross profit 5,156 5,203 6,913
Operating expenses:
Research and development 8,175 6,590 2,995
expenses, net
Selling, general and 19,816 19,361 11,952
administrative expenses
Impairment of goodwill and 6,731 - -
intangibles
Restructuring and related 1,389 - -
charges
Total operating expenses 36,111 25,951 14,947
Operating loss (30,955) (20,748) (8,034)
Finance expense, net 122 57 (26)
Gain on sale of HangXing - - 492
Loss before taxes on income (30,833) (20,691) (7,568)
Income tax benefit (expense) (156) 2,956 12,767
Net income (loss) from (30,989) (17,735) 5,199
continuing operations
Loss from discontinued - - (1,948)
operations, net of income taxes
Gain on the sale of discontinued - - 31,069
operations, net of income taxes
Non-controlling interest share
of loss from discontinued - - 540
operations
Net income (loss) (30,989) (17,735) 34,860
Net loss attributable to 1,275 1,024 549
non-controlling interests
Net income (loss) attributable
to Acorn Energy, Inc. $ (29,714) $ (16,711) $ 35,409
shareholders
Basic net income (loss) per share
attributable to Acorn Energy,
Inc. shareholders:
From continuing operations $ (1.57) $ (0.93) $
0.33
From discontinued operations $ $ - $
- 1.70
Basic net income (loss) per $
share attributable to Acorn $ (1.57) $ (0.93) 2.03
Energy, Inc. shareholders
Weighted average number of
shares outstanding attributable 18,916 17,891 17,462
to Acorn Energy, Inc.
shareholders – basic
Diluted net income (loss) per
share attributable to Acorn
Energy, Inc. shareholders:
From continuing operations $ (1.57) $ (0.93) $
0.32
From discontinued operations $ $ - $
- 1.67
Diluted net income (loss) per $
share attributable to Acorn $ (1.57) $ (0.93) 1.99
Energy, Inc. shareholders
Weighted average number of
shares outstanding attributable 18,916 17,891 17,743
to Acorn Energy, Inc.
shareholders – diluted
Dividends declared per common $ 0.035 $ 0.140 $ 0.085
share
ACORN ENERGY, INC. AND SUBSIDIARIES
CONSOLIDATED BALANCE SHEETS
(IN THOUSANDS, EXCEPT SHARE AND PER SHARE DATA)
AsofDecember31,
2012 2013
ASSETS
Current assets:
Cash and cash equivalents $ 26,147 $ 17,279
Restricted deposit 699 306
Accounts receivable, net 5,481 5,710
Unbilled revenue 5,213 6,421
Inventory, net 5,106 4,540
Other current assets 3,547 1,695
Total current assets 46,193 35,951
Property and equipment, net 927 2,432
Severance assets 3,165 3,539
Restricted deposit 115 -
Intangible assets, net 9,561 3,735
Goodwill 6,630 4,429
Other assets 745 870
Total assets $ 67,336 $ 50,956
LIABILITIES AND EQUITY
Current liabilities:
Short-term bank credit and current maturities $ 153 $ 2,303
of long-term debt
Accounts payable 2,631 3,086
Accrued payroll, payroll taxes and social 2,420 2,527
benefits
Deferred revenue 3,323 2,764
Other current liabilities 1,708 3,191
Total current liabilities 10,235 13,871
Non-current liabilities:
Accrued severance 4,491 4,973
Other long-term liabilities 665 600
Total non-current liabilities 5,156 5,573
Commitments and contingencies
Equity:
Acorn Energy, Inc. shareholders
Common stock - $0.01 par value per share:
Authorized – 30,000,000 shares; Issued
–18,870,526 and 22,957,859 shares at December 188 229
31, 2012 and 2013, respectively
Additional paid-in capital 83,469 93,943
Warrants 55 526
Accumulated deficit (29,733) (59,447)
Treasury stock, at cost – 801,920 shares at (3,036) (3,036)
December 31, 2012 and 2013
Accumulated other comprehensive income 716 184
Total Acorn Energy, Inc. shareholders' equity 51,659 32,399
Non-controlling interests 286 (887)
Total equity 51,945 31,512
Total liabilities and equity $ 67,336 $ 50,956
SOURCE Acorn Energy, Inc.
Website: http://www.acornenergy.com